Preston Bus takeover probe
The takeover of Preston Bus by bitter rival Stagecoach will be investigated amid fears it could drive up prices.
The Office of Fair Trading (OFT) has announced it has referred the 6.4m takeover completed in January to the Competition Commission for further investigation.
It said it was concerned the deal could "result in higher prices or decreased service quality to local bus users".
OFT senior director of mergers Amelia Fletcher said: "Stagecoach and Preston Bus were very close competitors, as demonstrated by the so-called 'bus wars' that took place in Preston prior to the acquisition.
"This merger has removed competition between them and the OFT is concerned that this may have a negative impact on price and service levels for bus users."
It added that it "could not rule out" that another bus operator would have come in to buy Preston Bus if it had gone into administration rather than agreeing a sale to Stagecoach.
David Costley-Wood, of finance firm KPMG which advised Preston Bus on the deal, told the Evening Post in March that there was interest from operators First and Arriva, but said the firm was only "two or three months" from going out of business.
Chris Bowles, managing director of Stagecoach North West, said it was "very disappointed" the OFT had referred the takeover.
>> For more on this story see Saturday's Lancashire Evening Post.
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Friday 03 September 2010
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